Street lights glowed dimly along Sarajevo's main street last night for the first time in months, and house lights sparkled across the hills around the city. But the government, to the irritation of UN officials and diplomats desperate to move the peace process forward, was not satisfied, insisting a cease-fire must wait for the extra 15 to 20 megawatts of power.

But the quibbling over power levels is almost certainly not the real reason for the delay. One diplomat, asked to explain the government's position, replied laconically: "Mrkonjic Grad."

The town, last obstacle on a major road linking government gains in northern and central Bosnia, fell to the Bosnian army yesterday. The Bosnian Serbs admitted a retreat from the town last night.

In another couple of days, the Bosnian Army should have secured Mrkonjic Grad and the road from Bihac to Travnik and might also have won control of Sanski Most and perhaps even Prijedor, securing another key road from Croatia.

The latter towns are also infamous as two major centres of murder, rape and ethnic cleansing: more than 4,000 Muslims have been expelled from the area in the past few days alone.

The UN High Commissioner for Refugees yesterday said 8,000 to 9,000 Muslims were facing expulsion across the front line to central Bosnia. Some 650 refugees, with their tales of horror, were expelled from the northern town of Sanski Most by paramilitaries loyal to Zeljko Raznatovic, the notorious warlord known as Arkan.

The UNHCR in Sarajevo said those expelled told stories of rape, robbery and torture, and of being detained without food in a makeshift camp as their men were taken away.

Once the ceasefire is in place, the UN may at last win access to northern Bosnia, where heavy fighting has reduced Serb holdings in the past few weeks. The peace-keepers will need freedom of movement along front lines to monitor the truce and report violations. At present, Sarajevo is probably the only front-line area where the UN has a decent view.

Sarajevo city centre and parts of the new town were enjoying the delights of (heavily restricted) power supplies, and even, in some privileged areas, water yesterday.

As was the case before the Serbs cut off electricity in May, residents are allowed to use only a few watts - enough to power a television set, a couple of lights and a stove, but no heating - hence the vital importance of gas supplies as winter approaches.

"The city is in the process of being completely gassed up," said Gordon Hay of the British Overseas Development Administration. "It is actually flowing into houses at the moment in the centre of the city and the new part of town."

The ODA engineers were promising a constant supply rather than the 24 hours on, 24 hours off Sarajevans were accustomed to. And the gas now smells, which should cut the number of explosions. In the past, as pressure fluctuated and pilot lights failed, odourless gas built up until some unfortunate householder lit a match.

"We've lived in the dark for so long," Bosiljka Maraus said, her eyes filling with tears, as the lights went on.

"I don't know what to do first ... I will cook something, then I will clean the flat." City streets filled with the hum of vacuum cleaners and the sound of music yesterday - though most people, like Mrs Maraus, did the chores first, fearing the supply would cut out after three or four hours.